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Published January 28, 2013

This article is not about playing the .01 isk game in Jita. It isn't about trading diamond tags at stupid prices in mission hubs, nor is it about freighter trading between Jita and Amarr. It's also not for everyone, as its very nature makes it inaccessible to most. This article is about an often unexplored avenue of trading; Market Trading in deep Low or Nullsec.

Background

A little under a year ago my corporation (FELON) joined a renter alliance out in Tribute called The Methodical Alliance. A station was quickly scrounged together (XD-T0V) and things were great for a few days. Then the 'industrial' players who were to be counted upon to seed the market for us, failed to do so. I discovered this when forming a fleet and trying to get logistics pilots. There were no Basilisks on market prompting the argument “I don't have one and can't get one.”.

Instead of yelling at the industrial guys to do better, I took my JF to Jita, loaded up some basic combat supplies and shipped them out. FELON had a 15% return on investment from that first load, netting about 150m profit. By doing this I was able to provide ships and mods for my fleets, combat price gouging and make some money; I was hooked. By the time FELON had left TMA, the corp had invested about six billion into the market. Not a single dime has entered the market program since then, FELON's market is now worth just shy of forty five billion isk, despite ten billion pulled out of it over the year.

 

Market Seeding

Market seeding is the act of bringing in large quantities of supplies to a station (and often region/constellation) where those supplies were not available before. Market seeding is commonly done in nullsec, and comes in two forms - contract seeding and market seeding. Market seeding has two sub-types, which I refer to as individual and multi-party seeding. The former is necessarily a predecessor to the latter; I'll explain.

Individual market seeding is a market with one dominant supplier. This supplier has to supply almost everything the residents of the area must use, because he is in competition with empire hubs. For convenience reasons, pilots travel to stations where they can get everything they need to fit a ship, which often means a trip to Jita (or the nearest major hub). Even pilots who do not have the logistical means to resupply themselves employ those who do as 'personal shoppers' for a fee. So, in order for a local market to be useful, it must provide every nut and bolt. This typically requires an amount of capital many consider 'astronomical'.

To give an example, before Fozzie made our game better by fixing all the cruisers, a fully seeded market was about 38 billion isk. Now a fully seeded market is about 55 billion isk. This market does not include Heavy Interdictors (~1.5b extra), or capitals (~35b extra). This statistic is not a measure of how much volume (in isk) the market moves (market velocity). It is a measure of the base cost of supplying 2 to 5 hulls of each ship and 2 to 5 sets of gear for each ship. To get an example of market velocity, the LAWN market out in Branch is a Conglomerate Market that moves 300 billion isk a month(3).

In addition to the capital requirements, an individual seeder often needs his own logistics as well - an empire freighter for bulk movement in secure space, and a jump freighter and accompanying cyno alt(s) for the final leg. The personal benefits are substantial, however. A truism of Eve is that most pilots are lazy, so the seeder can charge a substantial markup, all while providing a valuable service to his host alliance in the form of local supplies.

 

An individually seeded market can give way to a multi-party seeded market. Once the individual seeder has established the market and given pilots reason to buy there, they have lowered the barrier to entry. Smaller traders can compete with him in a smaller section of the market.

VFK is an excellent example of Conglomerate Market Seeding. In addition to being the capital of Goonswarm and the CFC, it is also one of the most docked in stations in nullsec and home to one of (if not the) largest market hub outside empire. A jump freighter service run by a member corp means that anyone can move freight at a ridiculously cheap rate, making it that much easier for the smaller traders to compete on the market. But there are many large fish as well, individuals such as Kintail who build or buy in the Jita area, then jump their own items out by the hundreds or thousands(2). This group of individuals is different from the first in that bulk import/export is their chosen profession in EVE and they have developed the tools and expertise to do it on a mind boggling scale.

A third factor are local builders, but they are a decidedly small contribution. Some of our other writers have penned lengthy articles dedicated to just how bad building in nullsec is, and it's all true. This group provides very little to the market, but what they do provide often tends to be at Jita prices or better.

All three types of traders contribute to keeping the market vibrant. Between cheap and fast freight services, it's highly resistant to market gouging, while the competition keeps the prices low for buyers. The larger number of involved players also means a greater breadth of fittings; something too small to be worth dealing with for a larger seeder is perfect for a newer player to get in and make some money on.

Contract Markets

As the name would imply, a contract market is a market derived entirely of contracts. It consists of pre-fitted ships, usually to meet alliance doctrines, but occasionally popular ratting fits are offered as well. They often coexist with the normal market as they provide a different service.

The nature of the contract system poses additional barriers to entry compared to normal market seeding. Shipping services are cheap enough to move modules, but the fees add up when it comes to moving hulls (at 200 isk/m3, a battleship costs 10m isk to move), making a personal jump freighter nearly mandatory. The time investment is higher, as fitting the ships and setting up contracts is much more involved than simply listing a market order. And, there's a literal skillpoints barrier as well. Pre-fitting ships requires a character with a broad skillset, and the nature of the contract system means any serious contractor needs several alts with maxed contract skills to have enough slots.

For all those reasons, the contract markets tend to be less competitive (and consequently more profitable) to get involved in. Yet, their existence is invaluable to the host alliance. A deep supply of pre-fit ships guarantees downed pilots can be back in the fight quickly, and that their ships will always be properly fit for the doctrine. This advantage is actually so important that the Goonswarm alliance finance team maintains an in-theater reserve to "backstop" contracts with(1), both to guarantee supply in the event of a bad welp and to mitigate potential price gouging.

 

Hopefully, I've given you, the reader, an interesting look into how (and why) lowsec and nullsec markets develop and function!

Sources

1 - Mynnna (Goonswarm Finance) – Full Interview Text

2 - Kintail (Bulk Importer of VFK)– Full Interview Text

3 - Basil Vulpine (LAWN Director of Industry and Logistics) – Full Interview Text

4 - Reginald Zebranky (Main CFC Contract Trader) - Full Interview Text

Islador
I'm an accomplished FC and have been playing for six years, I run FELON, the founding corp of Sadistica Alliance, and head the alliance. I also manage a ~50b isk market to support the alliance and am currently working as a technical writing intern.

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